Unintended Consequences Could Leave State With Fewer Local Metal Recyclers

The problem with a one-size-fits-all approach is that it leads to unintended consequences where only one side — Big Business — comes out the winner.

Legislation that assumes all metal recyclers operate the same needs a closer look. SB 404, authored by Senator Anna Caballero (Merced), is designed to mitigate the risks of hazardous materials being released into nearby communities and the environment and support the state’s metal recycling capacity that contributes to California’s circular economy. What’s concerning is that the plan would add a new layer of state oversight, creating the first state-level business operations permit requirement, in addition to duplicating our local permitting requirements.
All metal recycling facilities play an important role in the Golden State, but it is important to note a major distinction between the nine larger facilities (owned by three companies) that operate here and smaller operators like ours — and the unintended harm current legislation will do to the “smalls” if passed in its current form by policymakers.
As currently drafted, SB 404, in an unprecedented move, would place both large and small metal recyclers under the authority of the Department of Toxic Substances Control (DTSC). It appears the Department is trying to capture full authority over these business operations, including the aspects that do not involve handling of hazardous waste which is outside of their experience or scope of authority. My company already has permits from the California State Water Resources Control Board, California State Department of Health Services, local district air boards, and city and county permits. SB 404 would burden us with yet a new permit from DTSC, adding layers and duplicating our existing permits, which would cost us more than $14 million even though we are not making any changes to our existing operations.
SB 404 in its current form would run us out of business. It could easily wipe out the remaining smaller recyclers and create an oligopoly for the mega shredders. They already own 98% of the market and most are foreign-owned.
Shifting the recycling market could also disrupt the livelihoods of the thousands of peddlers who play a crucial role in keeping streets and communities clean by salvaging and repurposing discarded materials. It’s not just about metal — there’s an entire network of people depending on smaller recyclers to sustain themselves. When these local businesses disappear, it’s not just an economic issue but a blow to environmental efforts too.
Once the small recyclers are gone, mega recyclers will monopolize the industry and they could dictate prices in a way that squeezes out small sellers. That means fewer opportunities for independent workers, potentially making recycling less accessible and efficient. And that would completely undermine the whole way people make a living and help keep the environment clean and safe. The mega recycler would control the market and could even drop the price so they could make more money and forget about the little guy trying to peddle a piece of scrap metal just to survive.
Yes, SB 404 is well-intentioned, and Senator Caballero has been a devout champion of small businesses, the environment and good government. That’s why we hope she will appreciate and support a simple but important change to her bill that will protect small and large recyclers alike. There is no need to heap another layer of government on small recyclers just so one agency has full oversight, when at least five other agencies are already permitting the processes, and these businesses don’t even engage in the chemical treatment processes that the large recyclers do.

When it comes to recyclers, size matters!  And the consequences will be detrimental if not corrected.

Steve Slater is the Environmental Health Officer for Universal Services Recycling, Inc., located in Merced.